Walmart has been buying smaller e-commerce firms

Walmart has been buying smaller e-commerce firms

US retail giant Walmart is further beefing up its e-commerce strategy with the acquisition of women's online fashion and accessory retailer ModCloth.

As part of a push to buy up smaller online brands, Walmart closed the deal – for an undisclosed sum – late last week.

ModCloth is an online speciality retailer that offers what it says are "unique designs and exclusive fashion," along with shoes, handbags and accessories for 18-35-year-old women. In particular, the company has a strong focus on promoting size diversity, lifestyle inclusiveness and "body positivity," it says.

Headquartered in San Francisco, the company has a strong social media presence and operates one physical store in Texas and offices in Los Angeles and Pittsburgh. It offers clothing and accessories from independent designers and national brands, as well as private label apparel.

Walmart says ModCloth will continue to operate as a stand-alone and complementary brand to its other e-commerce sites. Independent designers who sell on ModCloth's site, it adds, will gain the opportunity to expand their reach.

"Apparel and accessories is the number one category for digital commerce, according to comScore, and we gain the experience of a well-recognised speciality apparel e-commerce brand that's trusted by millions of millennial women," Walmart says.

ModCloth CEO Matthew Kaness, his executive team, and ModCloth's 300-plus employees will continue to be based in San Francisco, Los Angeles and Pittsburgh.

This is the latest move by Walmart to compete more effectively with e-commerce players such as Amazon. The retailer has begun slowing down the pace of its store openings as it looks to ramp up growth in its online division as part of a new strategic framework.

Last month, the company acquired online outdoor apparel and gear retailer Moosejaw for US$51m, and earlier this year bought Last August it made a $3bn cash deal to acquire e-commerce start-up

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Tushar Patel, chief marketing officer of commerce platform Kibo, believes the move from Walmart will not only amp up its e-commerce strategy and help it compete against Amazon, but will also strengthen its personalisation strategy by continuing to acquire highly curated brands that expand the company's reach with new audiences.

"Our recent research indicates consumers today value personalised experiences as their top consideration for making purchases. Therefore, Walmart's purchase of, and the following acquisitions of Shoebuy, Moosejaw and now Modcloth, demonstrate a path to cater to a wider audience yet offer a more personalised experience through unique brands.

"This is new territory for Walmart, who previously built a reputation with consumers of being a the ultimate megastore. Expect to see more omnichannel experiences from those branded sites, such as in-store pick or ship from store – furthering their consumer experience strategies."

Meanwhile, Adrien Nussenbaum, US CEO and co-founder of software developer Mirakl adds: "Walmart is under pressure to show growth in the amount of digital commerce revenue it receives. They likely decided that buying these companies is a faster path to show growth than building out the capability themselves. The brands will most likely become featured internal sellers on the marketplace."